You Got Screwed! Why Wall Street Tanked and How You Can Prosper
Author: James J. Cramer
List Price: $20.00
Our Price: Click to see the latest and low price
ISBN: 074324690X
Publisher: Simon & Schuster (05 November, 2002)
Sales Rank: 40,079
Average Customer Rating: 2.97 out of 5
Customer Reviews
Rating: 5 out of 5
A Very Timely Read!
Cramer is an easy target for criticism, but this simple book has tremendous value.I took this book with me on a 7 day Caribbean cruise and had a great time reading it under the coconut trees of St. Maarten and Antigua. Being away from CNBC, Wall Street Week, and the constant media attention to the stock market was a welcome reprise.
And so was this book.
At first glance this book may seem a little bit light on information. It's only 117 pages long at a time when we expect about 300 pages from a typical John Wiley-type finance book. But it's not the number of pages that counts, it's the information, personal interpretations by Cramer, and solid financial wisdom that matter.
By the time I actually got around to reading this book (on those great beaches), I must say that I truly enjoyed it!
The book is divided into 3 very distinct parts.
The first part is about how the public got totally used by Enron, Worldcom, and Rhythms Net type scandals. Since all of these events were so recent it doesn't take long before you start recalling all the pieces of information that came out about these cases. Mr. Cramer does a nice job of taking us all back to those days and recapping what went wrong. Each one was revealing in its own unique way. And yes, we got used!
The second part pinpoints the other culprits in the stock market's two and a half year demise (and giant NASDAQ crash!). Cramer reminds as of the all-stocks-all-the-time mentality that came to be at the market's peak. Also the potential danger of executive options, shady accounting, too many one-way mutual funds, and always bullish brokerage firms. And by the way, these culprits are still at today!!!
And finally, there is the last section about what to do. Here is current advice and simple guidelines to avoid getting used again in the future. Some of the gems are:
1) Have some bonds for income
2) Have some cash for annual buying opportunities
3) Buy stocks in incremental "get your feet wet" amounts
4) Buy at least 5 stocks from 5 different industries
5) It's okay to sell
6) Sell some on the way up
7) Sell your losers because bad stocks may not go up at all
8) Know your stocks and how they make money so you have a feeling of their value.
9) Buy index funds for diversification and low expenses
10) Hedge funds are better than mutual funds in concept. Here's something to research more on. Mutual funds are financial products who's time has gone.
For those readers who want an enjoyable read, who watch CNBC, have an interest in tech stocks, and feel like they were used and want to avoid it in the future, here's a book for you. It's a reminder of how to keep your head when things get too crazy on either the upside or downside.
A very timely piece!
P.S.: As a fellow author I can understand Mr. Cramer's disappointment in the reviewing process. Some people think it's a sign of brilliance to degrade intellectual property when it's simply a matter of them just not getting it. My advice to these negative types is to stand aside if you're not going to be fair. Let the reader have a chance to appreciate the author's work....the content and the spirit.
Rating: 5 out of 5
Who's Screwing Who?
You just gotta love Cramer. Whether he's on his knees confessing to being a stock market addict or crawling across the table, ranting and raving on CNBC, he entertains, invigorates, and educates. But he's also a bull in the china closet - so now, after the 2000-2002 debacle, we get his condemnation of the whole Wall Street scene inscribed with the immortal words, "You Got Screwed," as he picks over the underbelly of the tainted beast. Yes, it's a short book, but that's its selling point: Cramer crams everything into something you can sit down and read in a couple of hours - and actually understand via his take-no-prisoners style. His brash attitude is more of the street fighter than the wood-paneled office executive, and this train wreck of a market comes alive with real personalities backed up against the wall as Cramer blasts them to bits. No words wasted. Just typical Cramer. You either love him or hate him, but you can't ignore him.
First he tells you why the system reeked and rotted, eventually collapsing under the weight of fakery and fraud. Then he ends the book by advising you how to never be caught up in Wall Street's self-serving ever again. And he does a good job of both.
His advice on how to protect yourself in the future is good, basic, Investing 101: "Admit the crash happened and move on, find a trusted financial advisor if you won't or don't want to do the homework yourself (he advises 2 hours a week), investigate and analyze companies prior to putting one red cent into them, forget 'buy and hold,' learn to read balance sheets, put emphasis on dividends, monitor insider and corporate ('buybacks') buying of their own stock, use P/Es to value stocks, always keep cash available, and avoid margin." Good advice from a pro who's seen and done it all.
Now the fun part begins. Mutual funds end up getting the brunt of the Cramer cannonballs. The game they played was "beat the numbers." The financial press loved it because it gave them "the reason" why the market was going up. Made they look smart. Cramer takes apart this silliness, exposing it for what it was - accounting gimmickry, pure and simple. All that the analysts and companies had to do was lowball the upcoming quarter, then "beat the number" by a penny, and we were off to the races. So why was the investing public taken in so thoroughly? "The public thought it knew all it had to know...Democratization (of stocks), however did not bring with it all the skills you needed to make good judgments for the long term. For example, no one provided the tools of how to read a balance sheet or assess cash flows. No one taught people how to spot red flags or how to tell if a company wasn't doing as well as you thought. And no one explained that stocks, particularly tech stocks, were high-risk pieces of paper..." (26)
Moving on to corporate governance, Cramer slams the looting of the treasury via stock options as corporate insiders served themselves a hearty dish of cheap stock, seemingly at no cost to the bottom line. Only later do we now realize that dog won't hunt either.
He indicts the SEC, the accountants, the corporate officers, the boards of directors, the media, the brokerage houses, the analysts, the academics...everybody except those whose money was being looted - the individual investor.
Cramer saves his strongest salvos for his slicing and dicing of Enron. His delivers an indictment of the whole political culture of the 90s with: "...maybe it was just everyone because Enron represented, not a simple fraud like WorldCom, but a wholesale breakdown of every aspect of the legal, accounting, governmental, and regulatory bulwark to keep corporate America honest." Sounds remotely familiar like another entertaining individual of the 90s who took shot at the same targets through humor. The comedian Seinfeld perhaps knew us better than we knew ourselves at the time, as his four scoundrels lied, cheated, scammed, and flimflammed their way through the decade - an era that produced a "something for nothing" attitude that seems to have permeated every facet of our lives, and emptied out our pocketbooks as well.
In the end, Cramer's diatribe is basically an intelligent, heart-felt cry for investor education. Education of investment techniques and strategies, and an understanding of ourselves. Learn that and you won't have to depend on a Cramer or anyone else to manage your finances, plus you won't get screwed by anybody either.
Rating: 3 out of 5
Could be a Five or a One
This is a short book describing some of the reasons why the tech bubble burst, the stock market tanked and how many companies lied, cheated and stole. It is a totally worthless book for any that are already seasoned in the business, however, for the neophyte or unlearned investor that has money on the line already, this book could prove priceless.Some time back I reviewed a book called "Net Zero", also a book describing how the bubble burst. I wrote in my review that the problem with the book was that it was much to technical for the beginner, i.e. the guy that really needs to read it. So the simple fact that this book is short, basic and too the point, shouldn't be considered a negative unless you already know the information.
If you're considering putting money into the market for the first time, and you don't already understand why the market tanked and how certain parts of the industry are stinking thieves, then you'd be foolish to pass on reading it. It could save you a fortune.
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